Top 5 tips - how to flip houses

Are
you considering investing in real estate? Are you interested in buying
an investment property, fixing it up and selling it, often called
flipping a property? House flipping in the real estate sector refers
to where you invest in a property with the objective of making a nice
profit on it, often in a relatively short period of time.
The golden rule with making money on property is always to buy low
and sell high, but there are risk factors that must be considered.
Especially if you are a novice investor or renovator, you need to
really do your homework and then some. Your ‘flip’ can
quite easily turn into a ‘flop’ and a significant financial
loss says Joe Santoro of Personal Property Managers.

This is part of an on-going series of real estate
articles by Nick Santoro and Joe Santoro of Personal Property Managers
who service Pennsylvania and New Jersey and specialize in real estate,
home content downsizing, property management and estate sales.

We suggest that home buyers, should buy with the
view to creating security for themselves and their families. Real
Estate does present the opportunity to not just grow your personal
wealth, but make some nice profits, if you approach it in a careful
way.

Some of the popular types of property that house-flippers
tend to look for are fixer-uppers and quick sale or distressed properties.

Older, up and coming neighborhoods also tend to
be good areas to consider if you want to profit from the property
flipping trend. This means that buyers are able to invest in older
properties, upgrade these and sell them for a profit.

If you are thinking about getting into the house-flipping
trend and want to make it a profitable venture, then consider
these 5 top tips:1. Buy smart
Always do your homework and ensure you buy smart. Investing in property
is a costly exercise, especially if your finances are tight. Even
if you are flush with cash, you would still want to exercise caution
and ensure you understand the area and market that you are investing
in. Be sure that there is a demand for the type of upgrades or renovations
that you are planning as it does not pay to overcapitalize.

2. Understand the market
It is important to have a good understanding of whether there is a
demand for the type of remodeling or upgrading that you are planning.
While a smart investor will create the need for his/her property,
you are often unfortunately guided by what buyers want and what they
are prepared to pay. This means that you need to research the area
and market thoroughly and ensure that your plans, asking price and
profit expectation match the current market.

3. Start with the end price in mind
Always start with the end price that you may be able to sell your
property for in mind. That is, the price right now that you could
get in the market given the economic and market cycle. Also be sure
to price in line with what the market will pay. Often, investors will
overspend on the upgrade of their investment property and then price
it at the top end of the market. Top end buyers tend to be few and
far between and can be quite discerning and will not pay an inflated
price regardless of how fabulous the upgrades are.

4. Renovation costs
Most renovators will tell you that it is almost inevitable that your
planned renovations or upgrades will turn out to cost more than initially
anticipated. Nonetheless, there are many examples of well-budgeted
and planned renovations that have turned older homes and complexes
into trendy spaces that have not only attracted buyers, but contributed
to upgrading the area.

5. Economic climate and property cycle
Generally, house flipping relies on a strong property market because
you would want to get a good price and for this, you need willing
buyers and some competition. The economy and property market are cyclical
in nature and heavily sentiment driven. This is something that we
see right now.

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For more information on real estate or home downsizing please contact Nick Santoro or Joe Santoro of Personal Property Managers at 215-485-9272 or 908-368-1909. Personal Property Managers specializes in helping home owners transition from their home of many years into a new community. Personal Property Managers services Pennsylvania and New Jersey and offers downsizing services, estate sales services, home staging, discount full service real estate services via its association with EveryHome Realty. Learn more about Personal Property Managers from our recent News Stories.